S&P Cuts Spain’s Ratings

Rating agency cites concerns country will have to provide aid to banks amid recession.

Spain’s sovereign credit rating was cut for the second time this year by Standard & Poor’s on concern that the country will have to provide further fiscal support to banks as the economy contracts.

S&P lowered Spain to BBB+ from A, with a negative outlook. Spain’s short-term rating was reduced to A-2 from A-1, New York- based S&P said in a statement yesterday. The yield on Spain’s 10-year bond rose 16 basis points to 5.99 percent.

Spanish Bonds

Yields on 10-year Spanish bonds surpassed 6 percent on seven trading days this month, boosting concern that borrowing costs may reach levels that prompted bailouts for Greece, Ireland and Portugal. The rate was 5.83 percent.

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